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01/08/93 JOSEPHINE CANADA v. MANAGEMENT PARTNERSHIP

DISTRICT OF COLUMBIA COURT OF APPEALS


January 8, 1993

JOSEPHINE CANADA, APPELLANT
v.
MANAGEMENT PARTNERSHIP, INC., APPELLEE

Appeal from the Superior Court of the District of Columbia; (Hon. Kaye K. Christian, Hearing Commissioner); (Hon. William S. Thompson, Trial Judge)

Before Ferren, Steadman and Farrell, Associate Judges.

The opinion of the court was delivered by: Steadman

STEADMAN, Associate Judge: Appellee, Management Partnership, Inc. ("landlord"), filed a claim for unpaid back rent and damages in the Small Claims and Conciliation Branch of the Superior Court against appellant, Josephine Canada ("tenant"), who had already vacated the premises. At a 1988 trial, a hearing commissioner found for landlord in the amount of $932.00, covering the months of July through September 1986, plus $139.80 in attorney's fees. *fn1 On review, the trial court affirmed the judgment. *fn2 We granted tenant's application for review by this court pursuant to D.C. Code § 11-721(c) (1989).

We reject appellant's claims that, at the time of this proceeding, hearing commissioners had no jurisdiction to hear Small Claims cases, and that she was held liable for rent for an excessive period of time. However, we agree that the award of attorney's fees was erroneous and must be vacated.

I

In attacking the jurisdiction of hearing commissioners in 1988 to hear small claims cases, appellant argues that Super. Ct. Sm. Cl. R. 2 dictates which Superior Court Rules of Civil Procedure apply in Small Claims Court. *fn3 She observes that Super. Ct. Civ. R. 73(a) *fn4 implements D.C. Code § 11-1732(a) and (j) which is the statutory basis for the jurisdiction of hearing commissioners. *fn5 She then notes that at the time of the hearing before the commissioner, Super. Ct. Sm. Cl. R. 2 did not include Super. Ct. Civ. R. 73 among the rules listed. Thus, appellant argues that because D.C. Code § 11-1732(a) and (j) are "subject to the rules of the Superior Court" and because the Superior Court Rules of Procedure for the Small Claims and Conciliation Branch govern in Small Claims cases, *fn6 the fact that Super. Ct. Civ. R. 73 was not included in Super. Ct. Sm. Cl. R. 2 at the time of the hearing precludes its use as a jurisdictional basis for the hearing commissioner. *fn7

This argument postulates that a court rule is a prerequisite to establish a jurisdictional basis for hearing commissioners to act in Small Claims cases. We disagree and think that such jurisdiction flows from the statute apart from Rule 73. In our view, D.C. Code § 11-1732(a) and (j)(5), by their own terms, constitute a direct statutory grant of jurisdiction to hearing commissioners, when specifically so designated by the Chief Judge and with the consent of the parties, *fn8 in the "Civil, Criminal, and Family Divisions of the Superior Court." D.C. Code § 11-1301 (1989) is specific in providing that "the Small Claims and Conciliation Branch shall continue as a branch of the Civil Division in the Superior Court."

It is, of course, true that D.C. Code § 11-1732(a) and (j) provide at several points that hearing commissioners are "subject to the rules of the Superior Court." See note 5, (supra) . From these provisions, appellant asserts support for her argument that implementation by rule is essential to hearing commissioner jurisdiction. We think a more straightforward reading of the quoted phrase -- and we are cited to, and find, no legislative history suggesting a contrary interpretation -- is to make clear that hearing commissioners are to "perform the . . . functions" authorized by the statute, see § 11-1732(j), in accordance with the Superior Court procedural rules that apply to the setting in which the case is heard. *fn9 Furthermore, while jurisdiction is not dependent on Rule 73, the intended breadth of the rule is manifested in the Comment which provides that "pursuant to D.C. Code § 11-1732, this Rule is applicable to proceedings in oil branches of the Civil Division." (Emphasis added). *fn10

In sum, we hold that the jurisdiction of properly designated hearing commissioners encompassed proceedings in the Small Claims and Conciliation Branch at the time of the proceeding here, as well as at the present time. See note 7, (supra) .

II

Appellant also argues that she was not responsible for rent or damages to the apartment after the landlord knew that she was not in compliance with a consent judgment praecipe, signed by landlord and tenant, in which execution was stayed subject to payment of rent. See Appendix of Forms (Form 4) in Superior Court Rules of Procedure for the Landlord and Tenant Branch. Tenant admits that in failing to pay rent in July, 1986, she did not comply with the terms of the praecipe but asserts that she is not responsible for rent or damages after that point because the landlord could have, upon her failure to comply, sought a termination of the stay and obtained possession through a writ of restitution. We do not agree. Here the tenant had a continued right to possession under the stay, and upon default, the right to proceed under the praecipe to retake possession was only one of several options available to the landlord for nonpayment of rent. See International Comm'n on English in the Liturgy v. Schwartz, 573 A.2d 1303, 1306 (D.C. 1990).

Tenant's reliance upon Ostrow v. Smulkin, 249 A.2d 520 (D.C. 1969), is misplaced, since there the landlord had an enforceable judgment which constituted demand for immediate possession, and the tenants had expressly notified the landlord that they were surrendering the premises in accordance with the demand. Here the landlord's right to possession on default of rent required an election to take further procedural steps to lift the stay and the tenant never communicated to the landlord any proffer of surrender. Furthermore, the record before us indicates that the landlord was not aware of the tenant's actual vacating of the apartment prior to September 3; although the lease required thirty days written notice of termination, the landlord sought no rent after September 30.

III

Finally, appellant challenges the award of attorney's fees to the landlord in this action. The landlord based its claim for such fees upon a provision in the lease agreement which read:

If my rent is unpaid, or if I violate any of the provisions of the Agreement, MANAGEMENT may institute whatever legal action is deemed necessary, and proceed to recover possession of the apartment. If MANAGEMENT takes legal action to repossess my apartment, I will still be obligated to pay my rent, fees, or damages that I may owe, nothing contained hereunder shall be construed to limit any rights MANAGEMENT may have upon RESIDENT'S failure to pay rent on the first day of the month, and I agree to pay MANAGEMENT'S reasonable attorney's fees awarded to such legal action. (Emphasis added).

The tenant argued before the trial court, as she does before us, that an award of attorney's fees based on this lease clause would be in violation of 14 DCMR § 304.4 (July 1991), which provides in pertinent part:

No owner shall place (or cause to be placed) in a lease or rental agreement a provision . . . requiring that the tenant [of residential premises] pay the owner's court costs or legal fees . . . . This subsection shall not preclude a court from assessing court or legal fees against a tenant in appropriate circumstances. *fn11

As we understand the record, the landlord argued to the trial court that the regulation, properly read, only prohibits clauses requiring that the tenant pay attorney's fees, and not those which (as landlord reads its lease clause) limit their application to such attorney's fees, if any, as a court of law may see fit to award. *fn12

We need not resolve this dispute to determine this appeal. *fn13 We are dealing here with the inclusion of attorney's fees in a judgment of the Small Claims Branch, which are allowed only in very limited circumstances. See Super. Ct. Sm. Cl. R. 19. *fn14 In particular, such an award must be based upon a contractual agreement to pay such fees. Additionally, regardless of the terms of the agreement, by case law dating back prior to the enactment of the regulation at issue, the trial court retains discretion to determine the amount of attorney's fees that may be reasonable in the circumstances. See Central Fidelity Bank v. McLellan, 563 A.2d 358, 359-60 (D.C. 1989), citing and quoting from United States v. Reed, 31 A.2d 673, 675 (D.C. 1942).

Under Small Claims Rule 19, then, as we interpret it in light of Central Fidelity, in order for attorney's fees to be awardable in Small Claims actions, the right to such fees must be an absolute right flowing from the agreement, with the trial court's role limited to assessing their reasonable amount. Thus, the landlord's own assertion that the lease provision allows only those attorney's fees that may be optionally awarded by a court (thus not violating the regulation) defeats landlord's argument that attorney's fees should be awarded in this Small Claims action. The landlord does not have an absolute right flowing from the lease and thus, the award here was in error. *fn15

Accordingly, the judgment of the Small Claims Branch is modified by striking therefrom the award of attorney's fees, D.C. Code § 17-306 (1989), and as so modified is

Affirmed.


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